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Admission Test Certified Public Accountant (Financial Accounting & Reporting) Sample Questions:

1. According to the FASB conceptual framework, comprehensive income includes which of the following?

A) Option A
B) Option D
C) Option B
D) Option C

2. In Yew Co.'s 1992 annual report, Yew described its social awareness expenditures during the year as follows:
"The Company contributed $250,000 in cash to youth and educational programs. The Company also gave $140,000 to health and human-service organizations, of which $80,000 was contributed by employees through payroll deductions. In addition, consistent with the Company's commitment to the environment, the Company spent $100,000 to redesign product packaging."
What amount of the above should be included in Yew's income statement as charitable contributions expense?

A) $390,000
B) $490,000
C) $310,000
D) $410,000

3. Brock Corp. reports operating expenses in two categories: (1) selling and (2) general and administrative.
The adjusted trial balance at December 31, 1989 included the following expense and loss accounts:

One-half of the rented premises is occupied by the sales department. Brock's total selling expenses for 1989 are:

A) $480,000
B) $370,000
C) $400,000
D) $360,000

4. An extraordinary item should be reported separately on the income statement as a component of income:

A) Option A
B) Option D
C) Option B
D) Option C

5. The effect of a change in accounting principle that is inseparable from the effect of a change in accounting estimate should be reported:

A) As a separate disclosure after income from continuing operations, in the period of change and future periods if the change affects both.
B) As a component of income from continuing operations, in the period of change and future periods if the change affects both.
C) As a correction of an error.
D) By restating the financial statements of all prior periods presented.

Solutions: